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Why Trump’s Immigration Plan Could Hurt Social Security

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By Michael Rainey

February 21, 2018

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Economists have warned that the Trump administration’s plan to reduce immigration and deport thousands of unauthorized immigrants could impose significant costs in terms of lower growth and lost human capital.

Howard Gleckman of the Tax Policy Center points out Wednesday that those costs include reduced support for Social Security.

His analysis is simple: “Fewer workers = less payroll tax revenue.”

Citing a recent study by his colleagues Damir Cosic and Richard W. Johnson at the Urban Institute, Gleckman says that an immigration proposal introduced by the Republican senators Tom Cotton (AR) and David Purdue (GA) – to reduce by roughly half the number of green cards being issued, eliminate the visa lottery system and create new rules to favor younger and better-educated immigrants – would reduce the U.S. workforce by 0.8 percent in 2030 from its current baseline, and by 8 percent by 2070.

As a result, Gleckman writes, “the law would reduce Social Security trust fund revenues by 0.8 percent in 2020, by 2.3 percent in 2030, and by 8 percent in 2070.” Benefits paid out would eventually decline, too, but not until 2050, and not enough to make up for the lost tax revenue.